Best-selling author Steven Covey often talks about cutting down trees with a dull saw as an analogy for a chronic problem in today's business world. People in business continue to use a "dull saw" because they don't take the time to stop and sharpen it. In other words, people continue to use the same archaic practices and products without taking the time to address the issues that could enhance the performance of their organization.
The result of this complacency is often a red-taped, sluggish company that gets left behind. If many credit unions would stop and sharpen their saws now and then, the long-term gain would result in improved efficiencies and, therefore, better products and service to their memberships.
One area where a credit union can address these issues and sharpen its saw throughout is leveraging technology. Many credit unions today have challenges maintaining their field of membership because they lack the innovative products and services to attract new members from other financial institutions. Credit unions have to be competitive in today's market to retain their members. Otherwise, what keeps a member from going down the street to another financial institution because they offer more convenience? Technology solutions can answer the proverbial competitive bell by leveling the playing field with its bigger competitors.
Overall, technology can definitely help trim old processes and procedures down to efficient, automated tasks. For example, innovative products that streamline a member's online experience such as Home Banking, Online Lending and Membership Application solutions, and others provide a credit union with an edge to attract members. These online features not only attract and retain members but they also trim the fat by enhancing the efficiencies of in-house operations through newly automated procedures. Therefore, the benefit to a credit union is twofold: increased member activity and reduced labor costs.
Take the $342-million Justice Federal Credit Union, for example. JFCU has experienced an increase in e-commerce services, as well as a decrease in call center transactions since the credit union implemented a home banking solution in December 2004. Justice, located in Chantilly, Va., reports a 9% increase in member logins to use the online home banking services, while its call center has experienced a 2% decline in transactions related to home banking services. As a result, Justice and its remote members are benefiting from the expanded online services 24/7. Members call in with relationship questions rather than account inquiries or transfers, which is a much more cost-effective use of the credit union's call center.
According to Carrie Todd, vice president of electronic delivery and support services for Justice FCU, these numbers are the result of the demand the credit union's members were seeking prior to implementing its new home banking solution. To date, Justice has more than 10,000 members who regularly use the online service to manage their accounts each month.
Thinking Outside of Tradition
Today, credit unions must think outside the confines of traditional consumer banking products and how technology can be turned into member convenience. Like home banking services, these types of products empower members to serve themselves, which can lead to less lobby visits and phone calls to the branch.
For instance, Pennsylvania State Employees Credit Union's UPost
Another non-traditional service, the service bureau option, allows many smaller credit unions to adopt technology solutions formerly affordable for only their larger credit union colleagues. With this adoption, these smaller credit unions can remain trim while growing exponentially with the help of their new technology. As the smaller credit unions grow, they can graduate from the service bureau solution, bringing the technology solution in-house as their resources increase.
The $46-million Choice Community Credit Union, for example, made its decision to utilize its vendor's service bureau hosting capabilities when it approached a crossroads in its technology strategy-either upgrade its IBM RISC server and hire more staff to support the new technology upgrade or move its Symitar core processing system to a service bureau solution. Based on economic and maintenance considerations Choice Community, located in Greensboro, N.C., went the service bureau route.
"We looked at the options of staying in-house or going with an outside vendor to host our system," says Martha Miller, CEO for Choice Community Credit Union. "It made economic sense for us to go with a service bureau provider. With our vendor's hosting capabilities, we didn't need to buy a new RISC box, hire more staff, and we didn't have to handle the added responsibility of maintaining our growing system. It was an easy, cost-effective choice."
Using A Sharp Saw
The end result of sharpening the saw with new technologies is providing top-quality member service. By consistently implementing new technologies, such as home banking, bill pay, online lending, etc., credit unions can save time through enhanced automation. This automation, in turn, gives staff more time to dedicate to the member's needs. Credit union staff can have the luxury of serving the members instead of servicing a system or a process.
In addition, if there are areas within an organization that are not performing to their fullest potential, the entire credit union is affected. Each department is not independent from one another; they all work together to be successful. Departments that are running efficiently should help other departments accomplish what they need. Subsequently, that allows credit union staff to do what they do best: serve members. After all, a credit union's ultimate goal is satisfying its member's needs.
One would think, however, that an adverse effect of trimming the credit union fat would be the possibility of staff losing jobs through enhanced automation via the sharpened saw or adopted technology. Not so fast. Automation enables staff to be more productive to better serve the members. For example, there are many instances where credit union tellers, operators, and MSRs have turned into project managers because of the automation that has been built into a particular process. This process not only assists the credit unions in ensuring projects are run more smoothly but also empowers the employee by providing them with additional opportunities.
Overall, it takes time, proper planning, and commitment to stay on track to reach the goal of operational efficiency and offering stellar products and services. Immediate results are always great. But keep in mind that staff acceptance and member adoption is crucial on the products and services that are being introduced. Once this goal is achieved, a credit union is sure to remain trim and agile with its new sharp saw.
Mike Lawson heads up DML Communications and can be contacted at 760.753.5943, mike
